UScellular / T-Mobile – What’s Next?

T-Mobile made a significant announcement in May of 2024, announcing an agreement to acquire UScellular’s wireless business and a portion of its spectrum.

UScellular / T-Mobile Transaction Timeline

8/4/2023
UScellular – Telephone and Data Systems and UScellular Announce Exploration of Strategic Alternatives for UScellular

5/24/24
Securities Purchase Agreement signed by TMUS and UScellular/TDS

5/28/24
UScellular – UScellular and TDS Announce Sale of Wireless Operations and Select Spectrum Assets to T-Mobile for Approximately $4.4 Billion in Cash and Assumed Debt

• T-Mobile to purchase UScellular wireless operations and customers

• T-Mobile to purchase 28% of UScellular spectrum

• T-Mobile to enter into a 15-year minimum term to lease an additional 2,015 towers from UScellular, in addition to the ~600 they are already on, from the ~4,500 cell towers owned by UScellular

• For one year after closing UScellular to lease spectrum to T-Mobile, including spectrum to ensure seamless transition of customers from UScellular to the T-Mobile Network

7/22/24
Final – Warren Letter to DOJ and FCC re T-Mobile/UScellular merger (senate.gov)

• Letter from well-known U.S. Senators to “closely scrutinize” the transaction

7/26/24
Schedule 14C Information statement released to the public

• Detail about the transaction, and timeline of how it all came together

• Interesting detail about high level corporate activities and business negotiations

8/2/24
USM (UScellular) Q2/2024 Earnings Call & Analyst Discussion

9/13/24
Description of Transaction, Public Interest Statement, and Related Demonstrations – by T-Mobile and UScellular

10/1/24
UScellular leadership, legal counsel, and T-Mobile legal counsel meet with FCC Members

10/3/24
Letter to FCC detailing discussion of 10/1/24 meeting

• 4 of 5 FCC Commissioners listed, Office of Commissioner Gomez is not listed on the documentation

UScellular / T-Mobile Transaction, what is next?

• T-Mobile and UScellular have announced they expect the transaction to close in mid-2025

• Initial Termination Date of the Agreement is November 24, 2025, with 2 x 6 month extensions

• The language contemplates potential of denial or delay via FCC and/or litigation

UScellular Still Plans to Monetize the Remaining 72% of its Spectrum

• To be determined: An outright sale to other wireless carriers, or to a private equity company such as Columbia Capital?

• UScellular will retain its portfolio of cell towers, continuing to market them for collocation

  • To be determined: Will UScellular hold the portfolio long term, and operate as a tower company while it adds tenants and value?

  • To be determined: Will large players make a bid to acquire this portfolio? (American Tower, Crown Castle, SBA, Vertical Bridge?)

  • Might UScellular be able to compete with existing tower owners in certain areas where they have cold steel locations, and provide attractive relocation terms for the major wireless carriers?

• At the time this post was written (October 2024), the FCC was composed of 3 Democrat-appointed commissioners and 2 Republican-appointed commissioners

  • What will the impact of the upcoming election be on the future make-up of the FCC?

  • Chairwoman Rosenworcel (Dem. appointed) and Commissioner Simington (Rep. appointed) terms expire in 2025

• The nationwide impact of this transaction appears to be regionalized (UScellular native coverage shown below), and in rural areas

  • It is our opinion that it is more likely than not that this transaction will be approved; whether that would be in 2025 or 2026 is to be determined.